April 23 (Bloomberg) -- Barclays Plc, Britain's third- largest bank, agreed to buy ABN Amro Holding NV for 67 billion euros ($91 billion) in the world's biggest financial-services acquisition.

Barclays offered 3.225 new shares for each share of ABN Amro, amounting to 36.25 euros a share when the Dutch bank's final dividend is included, the banks said today. The bid is 33 percent above ABN Amro's price on March 16, the last trading day before talks were announced. In a related deal, ABN Amro agreed to sell Chicago-based LaSalle Bank to Bank of America Corp.

The takeover of Amsterdam-based ABN Amro will create a company with about 217,000 employees, 47 million customers and the second-highest market value among European banks after HSBC Holdings Plc. The agreement may thwart plans by Royal Bank of Scotland Group Plc, Santander Central Hispano SA and Fortis to make a rival offer. The group scrapped a scheduled meeting with the Dutch bank today.

``The whole world will now look at what RBS, Santander and Fortis will do,'' said Joost de Graaf, who helps manage about $675 million at Kempen Capital Management in Amsterdam, including ABN Amro and Barclays shares. ``It would be an enormous surprise if they didn't'' make a counter offer.

ABN Amro shares fell 52 cents, or 1.4 percent, to 35.77 euros in Amsterdam. Barclays's stock dropped 17 pence, or 2.3 percent, to 733 pence ($14.68) in London. Royal Bank of Scotland shares rose 3 pence to 2,030 pence.

Cutting Costs

Barclays Chief Executive Officer John Varley will be CEO of the combined bank, and 55-year-old Robert Diamond, who runs Barclays's investment bank, will be president. Arthur Martinez, 67, ABN Amro's chairman, will have the same role at the enlarged company. The new bank's headquarters will be in Amsterdam.

``The plans we have set out are sensible and deliverable,'' Varley, 51, said on a conference call with journalists today. ``The new entity provides our employees with a new and exciting future as one of the largest banks in the world.''

The bank will become the biggest in the world by assets, with about $3.1 trillion, excluding LaSalle, data compiled by Bloomberg show.

London-based Barclays plans to slash about 12,800 jobs, or almost 6 percent of the combined workforce excluding LaSalle, to help reduce costs by 2.8 billion euros. The bank would move an additional 10,800 positions to ``low-cost locations'' such as India. The company expects the combination will yield 3.5 billion euros of cost savings and additional revenue by 2010.

`Start of the War'

ABN Amro CEO Rijkman Groenink told reporters that Barclays is ``the best partner'' for the Dutch bank, adding that he's still open to competing offers. A proposal from the Royal Bank- led group ``is not on the table today, so let's not speculate about that,'' he said in an interview. Groenink, 57, will become a non-executive director following the deal.

Royal Bank of Scotland and its partners have said they are considering a breakup of ABN Amro. The group may be able to pay 40 euros a share or more for ABN by eliminating more jobs and overlap than Barclays, analysts at Keefe, Bruyette & Woods Ltd. have said.

``This seems to be the start of the war rather than the end,'' said Simon Willis, an analyst at NCB Stockbrokers in London, who has a ``buy'' rating on Barclays.

Bank of America

ABN Amro's decision to sell LaSalle to Charlotte, North Carolina-based Bank of America for $21 billion in cash has complicated Royal Bank's plans. The Royal Bank-led group said in a statement they were canceling a planned meeting with ABN Amro today while they seek more information on how the sale of LaSalle could be terminated.

Barclays and ABN Amro said they plan to return an estimated 12 billion euros in excess capital to shareholders following the sale of LaSalle, mainly through a stock buyback. Buying LaSalle will make Bank of America the biggest bank in Chicago and fill in one of the few remaining holes in the nation's most extensive branch network.

The offer for ABN Amro comes two months after London-based hedge fund TCI Fund Management LLP, run by Christopher Hohn, called on Groenink to consider breaking up the company. TCI said today the sale of LaSalle ``unfairly hinders'' a bid from Royal Bank of Scotland, and demanded ABN Amro disclose the terms of the transaction.

High Price?

Barclays agreed to pay 2.8 times ABN Amro's book value, more than the 2.1 times Milan-based Banca Intesa SpA paid last year in its 27 billion-euro takeover of Sanpaolo IMI SpA, Bear Stearns Cos. analysts said in a note today.

``Barclays looks to have paid a lot for ABN Amro,'' said Colin Morton, who helps manage $1.8 billion at Rensburg Sheppards Plc in Leeds, including Royal Bank and Barclays shares. ``What Barclays have tried to do is to make it much more difficult for anyone else to break the agreement.''

ABN Amro was advised by Lehman Brothers Holdings Inc., Morgan Stanley, N.M. Rothschild, UBS AG and its own investment bank. Morgan Stanley and UBS each provided a fairness opinion to the management board. Goldman Sachs Group Inc. gave a fairness opinion to ABN Amro's supervisory board. Barclays was advised by Citigroup Inc., Credit Suisse Group, Deutsche Bank AG, JPMorgan Cazenove and Lazard Ltd., as well as Barclays Capital.

Lead Regulator

ABN Amro's agreement with Bank of America permits the Dutch bank to reach a deal to sell LaSalle at a higher price within 14 days and allows Bank of America to match any higher offer. The U.S. bank may get a payment of $200 million if the agreement is terminated ``under certain limited conditions.'' Barclays and ABN Amro also agreed to a 200 million-euro breakup fee.

Britain's Financial Services Authority would be the main regulator for the enlarged bank, the companies said.

ABN Amro was the product of a 1991 merger of the two biggest Dutch banks. The company made half its revenue last year from interest income on loans, a quarter from commissions, and most of the remainder from trading and investment banking.

ABN Amro entered takeover negotiations after the 2006 purchase of Italy's Banca Antonveneta SpA increased costs and bad loans rose in the U.S., Latin America and Taiwan. First-quarter profit this year increased 31 percent, helped by a gain from the sale of its U.S. mortgage business, it said April 16.

Barclays, which traces its roots back 300 years to banker James Barclay, is the U.K.'s No. 3 bank after HSBC and Royal Bank. It said on Feb. 20 that 2006 net income jumped 33 percent to 4.57 billion pounds, spurred by its Barclays Capital securities unit. Barclays Capital, led by Diamond, contributes about a third of the bank's pretax profit.

To contact the reporter on this story: Ben Livesey in London blivesey@bloomberg.net; Jon Menon in London at jmenon1@bloomberg.net.

Last Updated: April 23, 2007 13:22 EDT